Resort Income Investors Inc. Sells $6,250,000 Grand Palais Casino Inc. Loan for Face Value

Strategic Insights

Apr 16, 1995 — 1 min read

Resort Income Investors Inc., a real estate investment trust (REIT) under the provisions of the Internal Revenue Code, has sold its $6,250,000 loan to Grand Palais Casino Inc. to a party unaffiliated with the company. The sale was made for the note's face value plus all accrued and unpaid interest up to the sale date. This transaction marks the culmination of the loan's development purpose, which was to finance the construction of a land-based casino in New Orleans owned by Harrah's New Orleans. Resort Income Investors Inc. will utilize the proceeds from the sale to fund additional loans in accordance with its investment policies.

Key Takeaways:

The sale of the Grand Palais Casino Inc. loan was conducted for its face value of $6,250,000 plus all accrued and unpaid interest.
The Grand Palais Casino Inc. loan was originally funded in February 1994 for the development of a land-based casino in New Orleans, a project in which Hemmeter Enterprises Inc. is a one-third owner.
As a result of the sale, Resort Income Investors Inc. will distribute the proceeds in accordance with its agreement as a REIT to distribute at least 95 percent of its taxable income each year.
Resort Income Investors Inc. operates as a lender specializing in resort and gaming developments, with a portfolio composed mainly of loans made to affiliates of Hemmeter Enterprises Inc.
The company's loan portfolio includes mortgage loans primarily made to affiliates of Hemmeter Enterprises Inc. succeeding Hemmeter Partners as the administrative entity for future Hemmeter developments.
Resort Income Investors Inc. will use the proceeds from the sale to fund additional loans in accordance with its investment policies.

Statistics:

Face value of the Grand Palais Casino Inc. loan: $6,250,000 USD
Interest accrued up to the sale date
Percentage of income distributed by Resort Income Investors Inc. as a REIT: 95%

Sources:

"Resort Income Investors Inc. (RII) CO: Resort Income Investors Inc.; Hemmeter Enterprises Inc.; Grand Palais Casino Inc. ST: Colorado IN: FIN SU: TNM MO-JL -- LA007 -- 7835 04/17/95 08:50 EDT"

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